Public transport fare increases

Mr Gerald Giam Yean Song asked the Minister for Transport (a) what is the quantum of MRT and bus fare increases sought by each public transport operator in their latest submission; (b) whether the new fare subsidy schemes recommended by the Fare Review Mechanism Committee will be rolled out before any fare increases take place and all eligible commuters given ample time to apply for the subsidy schemes; and (c) how the Ministry will reach out to all commuters to ensure that they benefit from the subsidies they are eligible for.

This was a question that I asked the Minister for Transport during the 20 January 2014 sitting regarding the public transport fare increases that the public transport operators had sought. I had filed it before the announcement of the fare increases on 16 January. (Parliamentary questions have to be filed 7 working days before the sitting).

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Mr Gerald Giam Yean Song asked the Minister for Transport (a) what is the quantum of MRT and bus fare increases sought by each public transport operator in their latest submission; (b) whether the new fare subsidy schemes recommended by the Fare Review Mechanism Committee will be rolled out before any fare increases take place and all eligible commuters given ample time to apply for the subsidy schemes; and (c) how the Ministry will reach out to all commuters to ensure that they benefit from the subsidies they are eligible for.

Mr Lui Tuck Yew (The Minister for Transport):

The Public Transport Council (PTC) announced its decision on the 2013 fare adjustment last week. Although both public transport operators had applied for a fare increase of 6.6%, which is the combined fare cap for 2012 and 2013, the PTC approved an overall net fare increase of 3.2%, and rolled over the remaining 3.4% to the 2014 fare review exercise.

I would like to thank the Council for taking into consideration my earlier request during the November 2013 parliamentary sitting for the fare increase not to exceed the average national wage increase for 2013, which should come in at about 4-5%. The 3.2% fare increase is well below this, and hence public transport fares will continue to be affordable for the average commuter.

At the same time, the PTC decided to implement several enhancements to existing fare concession schemes as recommended by the Fare Review Mechanism Committee (FRMC). Up to half a million commuters stand to benefit. These include young children, students, in particular, polytechnic students, senior citizens and adult commuters who are heavy users of public transport.

The PTC decided that these enhancements will come into effect on the same day as the fare increase, that is, 6 April 2014.

On its part, the Government has decided to implement fare concession schemes for two groups of commuters who may be most impacted by the fare increase, that is lower-wage workers who are under MOM’s Workfare Income Supplement (WIS) Scheme, and persons with disabilities.

Eligible recipients will be notified around 6 April to apply for the two concession schemes, which will take effect from 6 July 2014. Transport vouchers will be provided to help them for the interim period between the fare increase on 6 April, and 6 July when the concessions take effect. These being new schemes, we need more time to set up the frameworks and processes, and to cater to potentially half a million applicants.

Let me assure the Member that my Ministry, the public transport operators and TransitLink will extensively publicise the enhanced and new concession schemes in the coming weeks, so that potential beneficiaries are made aware and can apply for and enjoy the concessions.

The Workers’ Party (WP) welcomes the new and enhanced concession schemes to make public transport more affordable for people with disabilities, senior citizens, low-wage workers, students and full-time national servicemen. These groups will finally enjoy some overdue relief for their travel needs, for which the public and the WP have lobbied for years.

The concessions, however, should not be used as a sweetener to make the latest fare increases palatable.

With an initial increase of 3.2% in 2014 and an increase of 3.4% rolled over to the fare review exercise next year, this could mean a heftier increase in 2015. We are concerned that the majority of the commuters may still experience a very large overall fare increase of up to 6.6% in the next two years.

This latest round of fare hikes comes on the back of a substantial $1.1 billion government subsidy in our public transportation system through the Bus Services Enhancement Fund (BSEF) last year.

The fare hike has also come despite train breakdowns having become a regular affair, further compounding the frustrations of commuters, who are frequently affected by such service quality and reliability lapses.

We are disappointed that the fare hike will take place three months before the concession schemes for low-wage workers and people with disabilities are to be implemented. We call for the fare hike to be delayed until the new concession schemes are implemented.

The WP believes that public transport should be provided as a public good and not for profit. Service quality, reliability and fare affordability should come before the need to ensure the profitability of PTOs.